An Asia producing over half of global GDP? Three billion Asians considered part of the "rich world" by 2050? A dream ... or plausible reality?

It could happen if the region's economy keeps growing at its current rate and if new Asian generations grab the baton and run with it.

That baton, however, could be a very slippery one. There are several daunting multigenerational challenges and risks that must be overcome along the way.

It is true that developing Asia led the world out of its worst recession since the Second World War. And it is true that the centre of economic gravity appears to be shifting toward Asia.

So an "Asian Century" is certainly plausible. But Asia's rise is by no means preordained.

Asia's march toward prosperity and the freeing of the region from extreme poverty will require much more than simply high growth. Yawning inequalities must be narrowed. And as home to over half of the world's population, Asia must confront a massive wave of urbanization and grapple with changing demographic profiles.

Asia's long-term competitiveness will depend heavily on the intensity of its resource use, including resources such as water and food, and an ability to manage the region's carbon footprint. It is in Asia's best interest to encourage and invest in innovation and clean technology to maintain its impressive growth momentum.

These challenges are anything but mutually exclusive. Asians are addressing these challenges by continued improvements in productivity, taking steps to tackle climate change and impact of global warming and focusing on inclusive growth. But the list of challenges is long and if left unattended could deprive millions of Asians the opportunity to participate in the region's progress.

These risks not only reinforce one another but could exacerbate existing tensions or create new conflicts. If not managed intelligently, they could threaten the hard-earned gains of the past 40 years, and undermine the huge potential gains possible over the next 40 years.

Asia must learn from history. Perhaps the most important lesson is to avoid the mistakes that countries or regions in the past made after an unprecedented era of rapid growth and industrialization.

The fast-growing economies of China, India, Indonesia and Vietnam cannot afford to fall into a middle income trap while moving from resource-driven growth with cheap labour and capital to growth with high productivity and innovation.

Then there is the great challenge of governance and institution-building – an Achilles heel for most Asian economies. Institutional quality must rise as much as corruption must be quashed.

The ultimate challenge is effective governance – governance that provides quality health care and education; the infrastructure to move goods and people; the creation of efficient, livable cities; stable banking and financial systems; and reliable, fair legal structures that protect citizens' rights.

In short, Asia must modernize its governance systems and retool its institutions to ensure transparency, accountability and enforceability.

Globalization, embracing open regionalism and better regional co-operation has helped bring us success thus far. If we strengthen this process further with innovation and entrepreneurship, focusing on greater inclusion within and across economies; if we pursue sustainable development and improve governance as the key building blocks for the future; then yes, an Asian Century is both plausible and reachable.

It is time to look at ourselves in the mirror and learn from our mistakes as well as successes. Policies that worked when Asia was low-income and capital scarce are less likely to work today and unlikely to work in the future. Asia's leaders must devise bold and innovative national policies while pursuing regional and global co-operation.

I believe regional co-operation and integration are critical to Asia's march toward prosperity. Greater co-operation helps protect hard-won economic gains from external vulnerabilities. But it also cements the region's economic power and strengthens its voice in an ever-evolving global financial architecture. Regional co-operation is the bridge linking individual economies with the rest of humanity.

But even more important, Asians must learn to trust each other. Without trust little can be achieved in regional co-operation. Yes, Asians can learn from Europe's history. But we must also learn from our own history of transforming conflict to co-operation – the Association of Southeast Asian Nations and the Greater Mekong Subregion are two cases in point.

Asia's future global footprint carries with it new responsibilities and obligations. Global public goods – such as free trade, financial system stability, climate change and security – are responsibilities we must embrace and show the world our willingness to be constructive in advancing the global commons. As an emerging global leader, Asia should act and be seen as a responsible global citizen.

Let me stress that the Asian Century is not Asia's Century. It will be the century of Shared Global Prosperity, where Asians will take their place among the ranks of the affluent – on par with those in Europe and North America.

Our challenges remain formidable. Future prosperity must be earned. And as advanced economies know well, it is never preordained.